Grover Norquist Gives Thumbs Up to Pot Taxes

The antitax advocate tells National Journal that taxing marijuana does not violate his pledge.

A cannabis plant grows in the Amsterdam Cannabis College, a non profit charitable organisation that gives information on cannabis and hemp use on February 7, 2007 in Amsterdam, Netherlands.
National Journal
Alex Seitz Wald
Oct. 24, 2013, 12:29 p.m.

Good news for Re­pub­lic­ans who want to leg­al­ize marijuana: Tax­ing pot is A-OK with Grover Nor­quist, the keep­er of the an­ti­tax pledge that hun­dreds of GOP law­makers have signed.

Last month, Nor­quist joined Reps. Earl Blumenauer, D-Ore., and Dana Rohra­bach­er, R-Cal­if., two of Con­gress’s most out­spoken drug-policy re­formers, to push a plan that would al­low marijuana-re­lated busi­nesses to write off their busi­ness ex­penses. The fed­er­al tax code con­siders state-ap­proved dis­pens­ar­ies drug traf­fick­ers, even in the 20-plus states that have med­ic­al marijuana or full leg­al­iz­a­tion. Nor­quist, Blumenauer, and Rohra­bach­er want to put an end to that.

But it raises a ques­tion: Would leg­al­iz­ing and tax­ing marijuana vi­ol­ate the pledge not to raise taxes?

After all, the Amer­ic­ans for Tax Re­form pledge states, “I will op­pose and vote against any and all ef­forts to in­crease taxes.” States that have already moved to leg­al­ize marijuana, such as Wash­ing­ton and Col­or­ado, plan to levy steep ex­cise taxes on the drug.

But Nor­quist tells Na­tion­al Journ­al that law­makers who signed the pledge and want to leg­al­ize and tax can­nabis are in the clear. “That’s not a tax in­crease. It’s leg­al­iz­ing an activ­ity and hav­ing the tra­di­tion­al tax ap­plied to it,” he says.

He com­pares leg­al­iz­a­tion to changes in al­co­hol reg­u­la­tion, as when a state leg­al­izes the sale of li­quor on Sundays or al­lows gro­cery stores to sell beer and wine where they pre­vi­ously couldn’t.

“When you leg­al­ize something and more people do more of it, and the gov­ern­ment gets more rev­en­ue be­cause there’s more of it … that’s not a tax in­crease,” he ex­plains. “The tax goes from 100 per­cent, mean­ing it’s il­leg­al, to whatever the tax is.”

At 25 per­cent on three levels of sales (on top of the state’s stand­ard sales tax of 8.75 per­cent), Wash­ing­ton’s marijuana tax is sig­ni­fic­antly high­er than its levy on al­co­hol, but it’s all the “same zone,” says Nor­quist.

A new Gal­lup Poll out this week found that a re­cord 58 per­cent of Amer­ic­ans fa­vor leg­al­iz­a­tion. The po­ten­tial budget­ary wind­fall has been enough to con­vince some liber­tari­an-lean­ing Re­pub­lic­ans like Rohra­bach­er to sup­port what has tra­di­tion­ally been a lib­er­al is­sue. If the ex­per­i­ments in Col­or­ado and Wash­ing­ton work out, ex­pect to see plenty of oth­er states fol­low­ing in their wake. And now, thanks to Nor­quist, there’s one less obstacle.